The lag occurs because once a stimulus package is approved the government has to spend the money which needs time to work its way through the economy.

The lag you're referring to is often seen in fiscal policy, specifically in the implementation of stimulus packages. Here's a step-by-step breakdown of why this lag occurs:

1. Policy Decision and Approval: Once an economic downturn or recession is identified, the government decides to implement a stimulus package. This package needs to be designed, debated, and approved, which can take a significant amount of time.

2. Implementation: After approval, the government needs to implement the stimulus package. This involves distributing the funds to the appropriate agencies, organizations, or directly to citizens. This process can also be time-consuming.

3. Spending the Funds: Once the funds are distributed, they need to be spent to stimulate the economy. This could involve businesses investing in new projects, individuals buying goods and services, or government projects getting underway. The speed at which this happens can vary widely.

4. Economic Impact: After the funds are spent, it takes time for the economic impact to be felt. For example, if the funds are used for a construction project, the economic benefits (like job creation and increased spending) won't be felt until the project is underway or completed.

5. Evaluation: Finally, economists will evaluate the impact of the stimulus package on the economy. This can also take time, as it involves collecting and analyzing economic data.

So, the lag in a stimulus package is due to the time it takes for each of these steps to occur. It's also worth noting that the effectiveness of a stimulus package can be influenced by a variety of factors, including the size of the package, how the funds are distributed, and the overall state of the economy.